The first home-made American flag put to the torch took awhile to light yesterday, as tens of thousands Iranians celebrated the 23rd anniversary of their Islamic revolution with renewed gusto.

Finally, it burst into flame, spreading fire to a dozen more flags clustered nearby. Chanting "Death to America," the crowd parted like the Red Sea as the fireball spread above their heads, engulfing an effigy of President George W. Bush and an Uncle Sam.

Burning the Stars and Stripes is nothing new in Tehran, though in recent years - as both Iran and the US played cat and mouse over improving relations - the wan ritual faded in importance. Until yesterday.

Bush's new posture toward Iran - calling it part of an "axis of evil" - appears to be energizing hard-liners and bolstering anti-American sentiment to the highest level in at least a decade.

Some Iranians do back Washington's new hard line against the Islamic regime, in which it accuses Iran of developing weapons of mass destruction, providing refuge to Al Qaeda fighters, and trying to destabilize Afghanistan - all charges Iran denies. But many others say that Bush's words are a setback: They have revitalized hardliners, weakened already beleaguered reformers, and frozen any chance of détente with Iran.

It also - almost by definition - makes it impossible for the US to explore expanding Iran's first helpful steps in Washington's post-Sept. 11 war against terrorism. "The reform movement [led by President Mohammad Khatami] was dying," says a woman long-time observer at the rally. "Now Bush has killed it."

Indeed, if the rally is any gauge of popular thinking today, it may mark a watershed period. Leaders of both hard-line and reform camps called for massive participation, and cast it as a popular response to Bush's "threat."

Anti-Americanism took over, as a once withering root of the regime became invested with new strength. At an event that in recent years was the purview only of true believers, yesterday a cross section of Iranians turned up.

Among the usual crowd crammed into Azadi Square, were some unusual: Women of fashion - from more exclusive parts of north Tehran - and entire families, many of whom hadn't participated in the past. Some said they were so fed up with Bush's words - taking them as a dent upon their national pride, even if they don't support the Islamic regime itself - that they were taking part in such a rally for the first time in their lives.

"I didn't hate Bush before, but now I really hate him," exclaimed another reform-leaning young woman in a black head scarf with brown trim, who asked not to be identified. "He's damaging everything. He has hurt the reformers, and is bringing all the hard-liners together."

Gone from President Khatami's speech was past talk of creating a dialogue of civilizations. Instead, he called US leaders "immature" and people of "black hearts" - strong words for a pro-reform icon who is known for his relatively polite tone, even with political rhetoric.

"The time for bullying is over," Khatami told the crowd, standing behind a flower-festooned lectern.

"Those running the US consider themselves the master of the world, and define their own interests in contradiction to the world's," Khatami said. "And since they have power, they use force.... Today, in an immature and ridiculous way, they are playing with you and your revolution."

The US is worsening hostility "day by day," Khatami said. "[The US] has to ask: 'To what extent was the horrible incident on Sept. 11 a result of US policies?' "

There could eventually be a more far-reaching result from Bush's inclusion of Iran, alongside Iraq and North Korea, in the official line-up of "evil" states - and possible next US targets. Though not widely evident in public, some Iranians have applauded the tough line - calling, faxing, and e-mailing by the hundreds during a Voice of America Persian service radio broadcast.

Rob Sobhani, an Iran expert and adjunct professor at Georgetown University, was in the VOA studio during the show, when Iranian callers proclaimed that Bush "has spoken to our hearts, which yearn for freedom," that he would be remembered as "another Abraham Lincoln," by those who now look beyond the Islamic regime entirely.

"They were proud, excited, and looking forward," says Mr. Sobhani. "Pride, because they are a very proud nation. Their 2,500 years of history has been tarnished by the last 22 years. They were very happy that the president separated the two.

"Excited because - wow - maybe something is about to happen. Maybe the American government has finally made a decision" - like backing an opposition that, he says, Iranians would welcome. "Many callers said: 'We would like to kiss [Bush's] hand.' "

Still, at the Tehran rally, Iranians spoke of the "triumph" of the 1979 revolution, which ousted the US and Israel-backed Shah Reza Pahlavi. The CIA had a hand in reinstalling that dynasty in 1953, when it played a role in a coup that toppled an elected government. Such meddling has rankled hard-liners ever since, and many others here who suggest the US tread carefully.

One effigy at the rally showed a Statue of Liberty with rockets instead of spikes in her crown and with a skull for a face. Instead of a torch in its right hand, it held up a bomb; in its left, a book with a star of David, representing Israel.

"It is wishful thinking to believe that the historical memory of the Iranian people has been erased," Khatami told the rally. He acknowledged that many believe that the Islamic system had not "met expectations," that society is riven with differences, and corruption is a huge problem. But he said "all Iranians" remain loyal to the aims of 1979.

"Those who were hurt by the revolution are exerting pressure, because you managed to get this country out of the hands of alien mercenaries and gave it back to your children," Khatami said. "This is not satisfactory to the superpowers."

Though stock rhetoric in Iran, such views were put in abeyance after Sept. 11, when converging self-interests appeared to herald the bud of a new US-Iran relationship. Iran agreed to allow US pilots to bail out in their territory while conducting operations in Afghanistan. Iran also shared US goals - years before Washington did - in stridently opposing the Taliban regime. It armed the Northern Alliance rebels for years.

And Iran played a key constructive role in negotiations in Bonn, Germany, late last year that created Afghanistan's interim government. But today, the White House and Pentagon accuse Iran of meddling with arms and cash in Western Afghanistan, of pursuing weapons of mass destruction, and of supporting violent Palestinian groups that Washington considers "terrorists."

"The US and Iranian delegations [in Bonn] were practically hugging and kissing each other. They were going around arm-in-arm doing everything together," says Barnett Rubin, an adviser to the United Nations at the talks, and an Iran-Afghanistan specialist at New York University.